Methanol price

U.S. formaldehyde prices for 1966—1989 are shown in Table 4 (115). Since the cost of methanol represents over 60% of formaldehyde s production costs, the formaldehyde price normally reflects the methanol price. Also, freight is a significant cost for formaldehyde since 1—3 kg of water maybe shipped with every kg of formaldehyde. The significant price increase in the early 1970s was due to the sudden rise in hydrocarbon prices caused by the Organization of Petroleum Exporting Companies (OPEC) cartel increasing oil prices. 

The price of hexamine can generally be expected to track the price of methanol, which is the raw material for formaldehyde. As a rale of thumb, the realized cost of hexamine moves 1 cent for every 4 cent move in the methanol price. The price also moves one-quarter of a cent for every 5/ton move in ammonia costs. Between 1995 and 2000, the price of imported hexamine dropped from 0.54/lb to 0.34/lb252. 

Figure 11.10 Sensitivity of olefins production cost to methanol price...

Btu per U.S. gallon (LHV) or about 21.1 GJ/t, these low methanol prices are not insignificant, as 90 per tonne translates into about 4.50 per mm Btu ( 4.25 per giga-Joule). Not surprisingly, although an MTG unit was built and operated by Mobil near New Plymouth in the Northern Island of New Zealand, the production of gasoline (at fuel value) from methanol proved uneconomical and the unit was shut down. 

Lower olefins are today produced by steam cracking of naphtha, LSR or other paraffinic feeds. Hie actual methanol price does not allow the methanol to olefins process to compete economically. However, if methanol will become more available firom natural gas transforming routes, then there is a great chance for that process to become commercial. 

Fig. 1.2 Evolution of the methanol price during the last 12 years (Source Methanex)...

The Berrenrath plant, which produced methanol, was finally shut down because of low methanol prices. Since then, only one new unit has been built, in Japan (20 t/d), but increasing interest from Australia and India has been reported [2,126]. In addition to some industrial projects in Europe (Czech... 

In this section both qualitative and quantitative data on the sensitivity to project economics are provided relative to major variables of natural gas cost, methanol price, capacity utilization, plant size, and plant cost. 

As dramatic as these data are, the selling price of methanol is even more so. Using a natural gas cost of 2.50/MMBtu and a methanol selling price of 200/1, the IRR is 21.7%. Relative to a methanol price of 150/t, the IRR increases 10%. Here, a methanol price increase of some 33% increases project profitability by 85%. 

When methanol prices are better, the change in IRR is less dramatic however, the loss of potential profit is still significant. In addition to IRR data, net present value (NPV) data were also developed. NPV was computed at a 10% discount rate over the 15 year life of the project. 

Figure 42 shows the project profitability sensitivity for plant sizes of 250,000, 500,000, and 750,000 tpy. These data were developed for a gas cost of 2/ MMBtu. These data show that plant size for a given methanol price dramatically affects profitability. The smaller 250,000 tpy plant has an IRR of 13.6% with methanol at 200/t the larger 750,000 tpy plant has an IRR of 24.2% at the same methanol price. Changing from the smallest to the largest plant improves project profitability by about 80%. Clearly, there must be special circumstances to warrant the small plant. There may be such reasons as market size, distribution system, plant location, and captive use that lead to a small plant project. 

If one considers that the operator at the remote site may have additional costs, such as increased shipping and possibty import duties, this "gate price" is effectively reduced. Assuming that these additional cost factors amount to 25/t, then the te price for this methanol in the preceding example is 175 25 = 150/t. At 120 and 140% plant cost and 150/t methanol price, with an IRR of 15%, the corresponding natural gas cost is about 1.55 and 1.05/MMBtu, respectively. 

Jack Faucette Associates, Methanol Prices During Transition, U.S. Environmental Protection Agency, August 1987. 

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